The Path to Universal

Healthcare Preliminary Paper on Universal Health Insurance

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Contents

CHAPTER PAGE

1. The Vision for our Health System 3 1.1 Universal Health Insurance for Ireland

1.2 Purpose and Guiding Principles

1.3 Building Blocks for Universal Health Insurance

1.4 Layout of Paper

2. Overview of Work Structures 7 2.1 Implementation Group on Universal Health Insurance

2.2 Universal Primary Care Project Team

2.3 Programme Management Office for Health Reform

2.4 Health Insurance Consultative Forum

3. Primary Care 9 3.1 Broad Description of the Workstream

3.2 Guiding Objectives for the Workstream

3.3 Progress to Date

3.4 Next Steps

4. Hospital Structures 12 4.1 Broad Description of the Workstream

4.2 Guiding Objectives for the Workstream

4.3 Progress to Date

4.4 Next Steps

5. Hospital Financing 15 5.1 Broad Description of the Workstream

5.2 Guiding Objectives for the Workstream

5.3 Progress to Date

5.4 Next Steps

6. Regulation of Healthcare Providers 20 6.1 Broad Description of the Workstream

6.2 Guiding Objectives for the Workstream

6.3 Progress to Date

6.4 Next Steps

7. Health Insurance Market 23 7.1 Broad Description of the Workstream

7.2 Guiding Objectives for the Workstream

7.3 Progress to Date

7.4 Next Steps

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8. Enabling Change 27 8.1 Introduction

8.2 New Transitional Governance Structures

8.3 Work of the Special Delivery Unit

8.4 National Clinical Programmes

8.5 Health Information and ICT

8.6 Human Resources

9. Designing a Universal Health Insurance Model for Ireland 34 9.1 Broad Description of the Workstream

9.2 International Evidence

10. Developing the White Paper 44 10.1 Development of an Analytical Framework and Capacity

10.2 Policy Choices and Trade-offs

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1. The Vision for our Health System

1.1 Universal Health Insurance for Ireland The Government is committed to a single-tier health service, supported by universal health

insurance, which provides equal access based on need, not ability to pay, and which delivers

the best health outcomes for Irish citizens.

Under universal health insurance (UHI), everyone will be insured for a standard package of

primary and hospital care services, including mental health services. Insurance will be

provided under a multi-payer insurer model with no distinction between “public” and

“private” patients. The system will be founded on principles of social solidarity,

encompassing the fundamental tenets of financial protection, open enrolment, lifetime cover

and community rating.

While health insurance will be mandatory, a system of financial support will ensure

affordability by paying or subsidising the cost of insurance premia for all those who qualify.

The introduction of UHI will see the purchasing of healthcare largely devolved to insurers.

Health insurers will commission care for their members from primary care providers,

independent not-for-profit Hospital Trusts and private hospitals. In doing this, they will have

a duty to use their purchasing role to ensure the provision of quality, continuous care across

settings. Furthermore, in line with the fundamental principle of social solidarity, neither

insurers nor providers operating within the UHI system will be allowed to sell faster access to

services covered by the UHI standard package of care.

Finally, the future UHI landscape will include a number of important regulators and national

statutory bodies including the Health Information and Quality Authority. These bodies will

regulate the quality of all health and social care services and will ensure that providers

exercise good governance, thereby guaranteeing their long-term viability and availability for

the communities they serve. The health insurance market will also be subject to regulation.

A new Insurance Fund will have a central strategic role in managing the flow of funds

between different arms of the health system, directly financing and centrally controlling some

healthcare costs, and working with health insurers to support the delivery of high quality,

integrated care.

1.2 Purpose and Guiding Principles At the heart of the Government’s plans on universal health insurance is a clear desire to

improve our health system’s ability to achieve its core purpose. This purpose has been

articulated in the Department’s Statement of Strategy 2011- 2014 as being:

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to keep people healthy;

to provide the healthcare people need;

to deliver high quality services; and

to get best value from health system resources.

Every step of the reform programme must be driven by, must deliver on, and must be

evaluated against this overall aim. As such, the reform programme is guided by the

following vision statement which captures the high-level objectives of our health service:

In shaping the future UHI system for Ireland, it is vital that we create a model which meets

the needs of the Irish system and the Irish people. While it is important to learn from other

countries and international best practice, ultimately, this requires us to take account of our

unique demographic, geographic, social, political and cultural landscape, and to tailor our

national UHI system accordingly. We must build a model which acknowledges our starting

point and which is grounded in a meaningful and clearly communicated value system. Thus,

in addition to the vision statement outlined above, a number of core principles have been

developed to underpin the design of the future system. These are as follows:

KEEPING PEOPLE HEALTHY –The system should promote health and wellbeing by

working across sectors to create the conditions which support good health, on equal terms,

for the entire population.

EQUITY–The system should provide financial protection against catastrophic out of

pocket expenditure through universal coverage of the entire population. A system of

compulsory UHI should ensure universal access to healthcare for all citizens based on need

rather than ability to pay.

QUALITY–The system should support the best health outcomes for citizens within

available resources.

EMPOWERMENT–The system should empower and support citizens, patients and

healthcare workers to make evidence-informed decisions through appropriate sharing of

knowledge and information.

PATIENT-CENTREDNESS–The system should be responsive to patient needs,

providing timely, proactive, continuous care which takes account, where possible, of the

individual’s needs and preferences.

EFFICIENCY AND EFFECTIVENESS– Incentives should be aligned throughout the

health system to support the efficient use of resources and the elimination of waste and to

drive continuous performance improvement and co-ordination across different providers.

REGULATION AND PATIENT SAFETY–Regulatory, governance and payment

structures should support the provision of safe, high quality, integrated care based on

national standards and protocols, and delivered in the most appropriate setting.

To develop an efficient and effective single-tier health

service which promotes equitable access to high quality

care on the basis of need.

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1.3 Building Blocks for Universal Health Insurance In implementing UHI, there are many important building blocks which must be put in place,

including:

the strengthening of primary care services to deliver universal primary care with the

removal of cost as a barrier to access for patients;

the work of the Special Delivery Unit in tackling waiting times and establishing Hospital

Groups as a precursor to Hospital Trusts;

the introduction of a more transparent and efficient "Money Follows the Patient" funding

mechanism and a corresponding charging regime for private patients;

the introduction of licensing legislation and a robust regulatory framework for healthcare

providers; and

reform of the private health insurance market.

Each of these building blocks can be arranged into a number of broad workstreams as

outlined in figure 1 below. As that figure demonstrates, each of the workstreams must be

informed and guided by overall health system objectives and all of them are dependent on a

series of critical enabling factors and initiatives, including the introduction of a unique patient

identifier, the development of supporting Information Technology and the flexibility

provided by the Public Service (‘Croke Park’) Agreement.

Figure 1: Workstreams under Universal Health Insurance

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1.4 Layout of this Paper Future Health: A Strategic Framework for Reform of the Health Service 2012- 2015 sets out

a strategic vision for reform of the health system and identifies the key high-level actions

needed to systematically deliver on this challenging change agenda. Building on that

strategic vision, the purpose of this preliminary paper is to provide a succinct update on work

in relation to universal health insurance as well as providing further detail on the path ahead.

The remainder of this paper is, therefore, as follows.

Chapter 2 briefly outlines the structures which have been put in place to support the health

reform agenda. Chapters 3 to 7 consider each workstream under UHI in terms of mapping

out the building blocks to be put in place, reviewing progress to date and setting out next

steps. Chapter 8 briefly identifies and summarises progress in relation to several critical

enablers. Finally, chapters 9 and 10 identify the major issues to be addressed in designing the

future UHI model and developing the White Paper on Universal Health Insurance.

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2. Overview of Work Structures

As can be seen from section 1.3, the path to universal health insurance involves complex,

‘whole system’ reform which will have to be very carefully managed and sequenced on a step

by step basis. In order to help the Department in this task, several key structures have been

agreed. These structures comprise a mix of both advisory and consultative bodies (eg. the

UHI Implementation Group, Health Insurance Consultative Forum) and new executive

entities (eg. the Programme Management Office, Universal Primary Care Project Team).

Details of the structures are set out below.

2.1 Implementation Group on Universal Health Insurance In February 2012, the Minister for Health established the Implementation Group on Universal

Health Insurance. The Group is tasked with assisting the Department in developing detailed

and costed implementation proposals for universal health insurance and in driving the

implementation of various elements of the reform programme. The Group will also advise

the Department on drafting the White Paper on Universal Health Insurance.

The role of the Group is an expert advisory one. This is reflected in its composition which is

not representative of all stakeholders, but, rather, consists of a mix of those with executive

responsibilities within the health service and external expertise, including international

experts, as follows:

Dr. Fergal Lynch, Deputy Secretary General, Department of Health (Chair);

Paul Barron, Assistant Secretary, Primary Care, Department of Health;

Dr. John Barton, Physician/Cardiologist, Portiuncula Hospital;

Prof. Reinhard Busse and Dr. Sarah Thomson (acting as alternates), international experts

working with the World Health Organisation, the European Observatory on Health

Systems and Policies and others;

Dr. Martin Connor, Special Adviser to the Department of Health with international

experience in healthcare management;

Brian Fitzgerald, Interim CEO, St. James' Hospital;

Tom Heffernan, Principal Officer, Department of Public Expenditure and Reform;

Mark Moran, Former CEO of the Mater Private Hospital and former Chairman of the

DoH/HSE Working Group on Reference Pricing and Generic Substitution;

Dr. Fergus O’Ferrall, Lecturer in Health Policy, Trinity College Dublin;

Dr. Barry White, Former National Director for Clinical Strategy and Programmes, HSE,

and

Liam Woods, National Director of Finance, HSE.

In line with the expert advisory focus of the Group, its membership will be subject to periodic

review as different stages in the implementation process are reached.

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The Implementation Group met on six occasions during 2012 and provided advice in relation

to the Department’s policy work on ‘Money Follows the Patient’, Hospital Groups and

overall design of the UHI model.

2.2 Universal Primary Care Project Team In conjunction with the Implementation Group, the Government has established a Universal

Primary Care Project Team, chaired by Paul Barron, Assistant Secretary, Department of

Health, to drive reform of primary care. The projects being overseen by the Team include:

Planning, costing and legislative preparation for the extension of free GP care;

Development of chronic disease management in primary care;

Promotion of capital investment in primary care centres;

Preparation for a new GP Contract to facilitate universal free GP care and intensive

chronic disease management;

Development of a transparent, objective formula for resource allocation in primary

care; and

Preparation for new governance and funding arrangements for primary care.

2.3 Programme Management Office for Health Reform The Department of Health is currently finalising plans for the establishment of a Programme

Management Office (PMO) to drive, co-ordinate and monitor the health reform programme.

The PMO will have a central, overarching, co-ordination function in relation to health reform,

ensuring that a structured, service-wide approach is taken to implementation. It will also be

responsible for taking a strategic view on the timetabling and sequencing of various reform

work strands, and for communication, monitoring and control activities in respect of the

overall programme.

The Department has produced an integrated reform plan for the health sector which will

represent a key management tool for the PMO. The plan maps and sequences both sectoral

and cross-cutting reform priorities for the health sector, identifying time bound targets and

key deliverables for each priority issue. It encompasses the major timebound actions listed in

Future Health: A Strategic Framework for Reform of the Health Service 2012- 2015 and the

revised Health Sector Action Plan for implementation of the Public Service Agreement, in

addition to other more detailed tasks and projects. The Department reports into the

Department of Public Expenditure and Reform on progress against the Integrated Reform

Plan on a regular basis.

2.4 Health Insurance Consultative Forum The UHI Implementation Group is complemented by a Health Insurance Consultative Forum

which includes representatives from the country’s four commercial health insurance

companies, the Health Insurance Authority and the Department of Health. The Forum is

tasked with examining how costs in the health insurance sector can be reduced whilst always

respecting the requirements of competition law. In addition, the Forum provides a vehicle for

engagement on issues relating to the implementation of UHI.

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3. Primary Care

3.1 Broad Description of the Workstream

The Programme for Government commits to significant strengthening of primary care

services to achieve Universal Primary Care (UPC) with the removal of cost as a barrier to

access for patients. The primary care workstream is, therefore, centrally concerned with

delivering on the phased introduction of UPC over the lifetime of the Government. The first

phase will provide for the extension of access to GP services without fees to persons with

illnesses or disabilities to be prescribed under new legislation. Access to GP services will be

subsequently extended on a phased basis with universal access to GP care without fees to be

achieved in the final phase.

In order to deliver on this commitment, the preparation of a new General Medical Services

(GMS) contract with GPs will be required. The new contract will have an increased

emphasis on the management of chronic conditions, such as diabetes and cardiovascular

conditions, with a focus on prevention and will include a requirement for GPs to provide care

as part of integrated multidisciplinary primary care teams. Full implementation of UPC will

also involve the development of a system of compulsory, universal registration with a

primary care team.

Finally, the workstream also involves the development of physical and ICT infrastructure for

primary care.

3.2 Guiding Objectives for the Workstream The overall aim of initiatives under this workstream is:

to strengthen access to, and affordability of, primary health care for the whole

population;

to deliver a new model of care which ensures provision of proactive, quality care in

the most appropriate setting, thereby resulting in a more efficient and responsive

healthcare system and improved patient outcomes; and

to support the move towards a single-tier system where everyone is insured and has

their care financed on the same basis.

3.3 Progress to Date Creation of a Universal Primary Care Project Team

The Universal Primary Care Project Team was established in January 2012. It is tasked with

working through the issues relating to the introduction of UPC, including driving progress

across several distinct work areas as outlined below.

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Extension of free GP care

Legislation to allow the Minister for Health to make regulations to extend access to GP

services without fees to persons with prescribed illnesses is currently being drafted by the

Attorney General's Office and the Department of Health. Publication is expected shortly with

implementation dates to be determined in due course.

Chronic Disease Management

The HSE is developing integrated chronic disease management programmes to improve

patient access and care in an integrated manner across service settings, resulting in best health

outcomes, enhanced clinical decision making and the most effective use of resources.

Guidelines are being developed for the following priority programmes relevant to primary

care: Stroke, Heart Failure, Asthma, Diabetes and COPD.

The Diabetes programme is due to start shortly. To this end, the Department has given

approval to the HSE to recruit 17 Integrated Care Diabetes Nurse Specialists to support the

phased roll out of the Diabetes Programme. Funding for these posts was confirmed in the

HSE National Service Plan for 2013. Additional funding has also been provided to facilitate

the implementation of the National Diabetic Retinopathy Screening Service in 2013 and to

provide for Diabetic Retinopathy treatment.

Capital Investment in Primary Care Centres and ICT

Progress is also being made in relation to the development of primary care physical and ICT

infrastructure. Primary care infrastructure is being delivered in three ways, namely via HSE

direct build, a leasing initiative and a Public Private Partnership (PPP) initiative announced in

July 2012.

The Capital Plan 2012-2016 contains provision for the delivery of primary care infrastructure

at eight locations, while the leasing initiative is expected to deliver up to sixteen facilities

which should be substantially completed by end 2013 / early 2014. The PPP initiative was

developed in the context of the Government’s recent €2¼ billion Infrastructure Stimulus

Package. It will see up to €115 million being made available for two bundles of primary care

centres to be delivered by PPP.

Of the 35 PPP locations announced in July 2012, approximately 20 will be offered to the

market subject to a) agreement between the local GPs and the HSE on active local GP

involvement in the centres and b) site suitability and availability. The HSE is currently

analysing the available sites in each location and engaging with the GPs in each location to

determine their interest in participating in the primary care centre development.

GP Contract Issues

The Department and the HSE are currently examining the changes that need to be made to the

GMS contract to facilitate the introduction of Universal Primary Care. As part of this

process, the Department has held discussions in relation to competition law with the

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Department of Jobs, Enterprise and Innovation, the Department of Public Expenditure and

Reform and the Competition Authority. There have also been preliminary discussions with

the Irish Medical Organisation (IMO) to outline policy in this regard. It is expected that there

will be further discussions once the legislation regarding the extension of free GP care is

published.

Resource Allocation

In order to support rational and equitable development of primary care teams, the HSE has

developed a Resource Allocation model based on deprivation and need. This provides an

objective, transparent mechanism for the allocation of posts in primary care.

Using this model, the HSE has completed a detailed analysis of the numbers and distribution

of public health nurses, registered general nurses, occupational therapists, physiotherapists

and speech and language therapists. The analysis reveals considerable variation across the 17

Integrated Service Areas in ratios of health care professionals to population, and to

population numbers in areas of high deprivation.

Based on this analysis, it is intended to recruit a range of additional posts as soon as possible

in 2013, as follows:

70 Public Health Nurses

37 Registered General Nurses

51 Occupational Therapists

46 Physiotherapists

47 Speech & Language Therapists

3.4 Next Steps Immediate next steps under this workstream include:

the completion of legislation providing for the extension of free GP care, after which

implementation dates will be determined;

the assignment of 17 Integrated Care Diabetes Nurse Specialists to HSE areas; and

in line with overall governance measures, the appointment of a National Director for

Primary Care.

There will also be ongoing work in 2013 to develop primary care infrastructure, fill new

primary care posts, and develop a new GP contract.

Finally, as noted in Chapter 8, work on reforming health sector governance and

organisational structures during 2013 will encompass a review of Integrated Service Areas

which will help to inform new structures for the delivery of primary care. Future work will

also need to contemplate the organisation of primary and community care in the future UHI

landscape.

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4. Hospital Structures

4.1 Broad Description of the Workstream

The overall objective of the Hospital Structures workstream is to fulfil the Programme for

Government commitment to transform public hospitals into independent, not-for-profit trusts.

The workstream firstly involves organising every public acute hospital in Ireland into a set of

Hospital Groups under a single management structure; a process which must take account of

the key principles and criteria set out in the Framework for Smaller Hospitals. Thereafter it

will be necessary to establish the legislative framework governing Hospital Trusts and to

agree an implementation process for the formal establishment of Trusts. This will require

strong engagement with work under the Regulation of Healthcare Providers workstream in

terms of (i) the process of authorisation associated with gaining ‘Trust’ status and (ii)

ongoing regulatory requirements and powers.

4.2 Guiding Objectives for the Workstream The overall aim of projects under this workstream is:

to establish new organisational and accountability arrangements for hospital services

so as to support improved hospital performance and, ultimately, improved patient

outcomes; and

to support the move towards a universal insurance-based health system where insurers

purchase care on behalf of all citizens from independent healthcare providers.

4.3 Progress to Date Development of Hospital Groups

In June 2012, the Minister for Health appointed Professor John Higgins to chair a Strategic

Board on the Establishment of Hospital Groups. The Strategic Board consists of

representatives with both national and international expertise in health service delivery,

governance and linkages with academic institutions.

A Project Team was established to make recommendations to the Strategic Board on the

composition of Hospital Groups, governance arrangements, current management frameworks

and linkages to academic institutions. The Project Team carried out a comprehensive

consultation process with all acute hospitals and other health service agencies, involving over

70 meetings and numerous written submissions.

Following this consultation process, the Project Team produced its Report on the

Establishment of Hospital Groups and its recommendations have been endorsed by the

Strategic Board. The final report has been submitted to the Minister and will be considered

by Government whose decision on the composition of Hospital Groups will be informed by

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it. In line with the Cabinet’s decision on the composition of Hospital Groups, these groups

will then be established on an administrative basis in the first instance.

As highlighted in 4.1 above, the development of Hospital Groups must be undertaken in

accordance with the key principles set out in the Framework for Smaller Hospitals.

Evidence Review on Hospital Trusts

Parallel with the work on Hospital Groups, the Department asked the Health Research Board

to undertake an International Evidence Review on Independent Hospital Trusts. This review

was submitted to the Department in October 2012 and highlights a number of important

considerations.

It found that independent hospitals, operating as legal entities responsible for their own

governance and finance, have had some success in England but not in New Zealand or

Scotland.

The documented factors which facilitated success in England included the fact that there was

a united vision and ethos, a large stable pool of funding, a successful internal market as a

result of population density and a number of services that could provide the same treatment

within easy reach. Importantly, there was also a very clearly designed process for

establishing, governing, developing and monitoring Foundation Trusts. Indeed, the large

volume of legal and regulatory work associated with the establishment of such trusts, and the

critical role of regulatory authorities such as Monitor, the Care Quality Commission and the

National Audit Office, is notable.

New Zealand, a small country with low population density, experienced a number of

difficulties establishing independent healthcare providers and more recent reforms have seen

a return to a regionalised system and a weakening of the purchaser/provider split. The

literature offers a number of reasons for this, noting that an internal market and competition

between providers and commissioners was not viable in the New Zealand health sector, the

anticipated customer choice had not occurred and the independent providers quickly accrued

financial debt. The operation of trusts in Scotland experienced similar issues and the National

Health Services Reform (Scotland) Act 2004 abolished the NHS trust and internal market

approach in Scotland.

These important findings will inform the detailed design of Hospital Trusts in Ireland, the

associated implementation structures and processes, and the wider contextual factors which

need to be considered. To that end, the review also notes that, alongside and integral to the

success or failure of independent hospital entities, a number of strategies were introduced to

manage healthcare cost increases in OECD countries. The cost saving strategies included care

at the appropriate level, the creation of an internal market, strategic purchasing, and public

private partnerships.

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4.4 Next Steps Immediate next steps include:

the creation of Hospital Groups on an administrative basis in the first quarter of 2013;

and

the establishment of a National Steering Body to provide guidance on the formation

of Hospital Groups and to issue specific implementation guidelines on the steps

required to give effect to groups.

Subsequent actions include:

in line with the principle of ‘reform, learn, reform’, reviewing the operation of

Hospital Groups to establish what changes, if any, are required prior to moving to

Hospital Trusts;

taking account of international experience, developing the policy and legal framework

for the creation of Hospital Trusts; and

commencing the process of authorisation for gaining ‘Trust’ status

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5. Hospital Financing

5.1 Broad Description of the Workstream The overall purpose of the Hospital Financing workstream is to support the ultimate delivery

of a single-tier system where every patient is funded on an individual ‘Money Follows the

Patient’ basis. As such, the Hospital Financing workstream involves the introduction of a

‘Money Follows the Patient’ financing mechanism for public patients and the introduction of

a corresponding charging regime for private patients in public hospital care. This work also

includes developing proposals for the creation of an interim purchaser of hospital services for

public patients and then working in tandem with the PMO and others to implement those

proposals. Finally, as the reform agenda advances, this workstream will evolve to encompass

issues relating to the ultimate move to an integrated, single-tier UHI system and the strategic

purchasing role of the proposed Insurance Fund within that system.

5.2 Guiding Objectives for the Workstream The overarching objectives for this workstream are:

to have a fairer system of resource allocation whereby hospitals are paid for the

quality care they deliver;

to drive efficiency in the provision of high quality hospital services;

to increase transparency in the provision of hospital services; and

to support the move to an equitable single-tier system where every patient is insured

and has their care financed on the same basis.

The ultimate goal is to have a value-based purchasing system which allows money to follow

the patient to the most appropriate care setting. The system must seek to align incentives so

as to encourage quality, continuous care across settings and support good health outcomes

across the whole population. As such, the Hospital Financing workstream will have to be

progressed in close conjunction with primary care reform, with both workstreams, in turn,

being guided by work on overall UHI design.

5.3 Progress to Date Development of ‘Money Follows the Patient’ Policy

In April 2012 a Hospital Financing Subgroup, comprising Departmental, HSE and hospital

representatives, was established under the auspices of the UHI Implementation Group. This

subgroup has worked intensively to develop draft policy proposals on ‘Money Follows the

Patient’.

In order to best deliver on the objectives of fairness, efficiency and transparency outlined

above, the policy proposals advocate the introduction of a prospective, case-based payment

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system (a Diagnosis Related Group system) to replace the current block grant allocation

mechanism for public hospitals1.

The proposals also detail the services to be covered by the ‘Money Follows the Patient’

system, how these services should be defined, the manner in which prices should be set, the

purchasing and price-setting structures which need to be established and the overall

contracting and payment process. They then map out the major building blocks and system

capacity which must be developed in order to introduce the new funding model, and the key

contextual constraints and interdependencies which must be factored into the implementation

plans, including policy and timing in relation to Hospital Groups. The proposals conclude by

outlining initial plans for introducing ‘Money Follows the Patient’ shadow funding of

inpatient and daycase care in 2013, with full phased implementation of the new funding

model from 2014 onwards.

The Government has approved the publication of the ‘Money Follows the Patient’ policy

proposals as a draft for consultation with stakeholders. The policy is available on the

Department’s website and a formal consultation process will commence shortly.

Development of Major Building Blocks for ‘Money Follows the Patient’

Ireland’s existing Hospital Inpatient Enquiry Scheme (HIPE) and National Casemix

Programme already provide a strong platform for development of the new ‘Money Follows

the Patient’ system. In addition, work has commenced on the development of several other

key building blocks for ‘Money Follows the Patient’. Some of these are highlighted below.

Electronic Claims Management Systems:

The HSE has awarded a contract for the phased roll-out of an electronic claims management

system. This system is essential for effective management of current private patient claims as

well as representing a key requirement for the future single-tier insurance system. The new

electronic system is currently live in twelve hospital sites with a further five expected to

come on board by the end of Q1 2013.

In addition to the above initiative, the HSE has also agreed to collaborate on an eClaims

project led by the health insurers, VHI Healthcare, Laya Healthcare and Aviva Health. The

aim of this project is to define an industry standard for electronic direct pay claiming for

those involved in hospital settings and to then drive the transition to full electronic claiming

in these settings. The new industry standard is currently being piloted in two sites, the

Beacon Hospital (private) and St. James’s Hospital (public/voluntary) and is progressing

well.

1 A Diagnosis Related Group (DRG) system classifies hospital activity into groups with similar resource use and

clinical characteristics. As such, it provides a transparent measure for reporting and funding hospital activity

and facilitating comparisons of cost, efficiency and quality.

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Patient-level Costing Project:

A patient level costing project is currently underway and is tracking resources used by

individuals from the time of entry to the hospital until the time of discharge. This project is

critical to ensuring a robust understanding of the costs of individual episodes of care at both

central and hospital level.

Two costing studies were undertaken in 2012 as part of the study, one based on 2010 cost

data and another on 2011 data. The 2010 costing study was completed in October 2011 and

its results are currently being used in the DRG price setting process for 2013. Hospitals have

also been provided with their own patient level cost data and a Qlikview support tool is

currently being rolled out to assist hospitals in analysing this data effectively.

The 2011 study is still in progress with an expected completion date of early 2013. This will

be followed by a further costing study on the 2012 data. It is intended that the output from

both the 2011 and 2012 studies will be used to set the DRG prices for 2014.

The project has highlighted the crucial importance of developing appropriate skills and

capacity at hospital level, in addition to robust patient costing and feeder ICT systems.

Pilot Project on Prospective Funding of Selected Orthopaedic Procedures:

A pilot project on prospective funding of selected orthopaedic procedures was initiated on 1st

July 2011. The initial phase centred on the provision of primary hip and knee replacements

(4 DRGs) in seven hospitals. A further five hospitals joined the pilot on the 1st January 2012.

The pilot involves deducting participating hospitals’ budgets by an amount of money related

to the 4 DRGs and then allowing hospitals to ‘earn’ this budget back based on care carried

out.

The pilot was very positively received and demonstrated significant improvements in

efficiency as measured by average length of stay and day of surgery admission rates (please

see figures 2- 5 overleaf). It also highlighted the importance of (i) strong engagement with

stakeholders, (ii) clinical leadership at hospital and national level, (iii) clearly agreeing

baseline activity so as to maintain overall financial sustainability, (iv) improving the

timeliness of HIPE coding and (v) developing capacity at hospital level, particularly in

relation to patient level costing so that hospitals can establish whether they are able to deliver

services at the agreed price.

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7.8

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JAN '1

2

DO

SA

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(%

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Monthly Figures 6 Month Smoothed

PHASE 1 PHASE 2

Figure 2: Average Length of Stay for Hip Replacement across all sites for July 2010- July 2012

Figure 3: Average Length of Stay for Knee Replacement across all sites for July 2010- July 2012

Figure 4: Day of Surgery Admission Rate for Hip Replacement across all sites for July 2010 – 2012

19 | P a g e

5.4 Next Steps As highlighted within the ‘Money Follows the Patient’ policy paper, the immediate next steps

under this workstream include:

Consultation with stakeholders on the policy, and detailed financial modelling and

planning in order to inform a finalised policy and implementation timetable;

Development of a corresponding charging regime for private patients in public

hospitals;

Shadow funding of Hospital Group ‘hubs’ during 2013; and

Dovetailing with work on the creation of new Hospital Groups, the development of

critical infrastructure, skills capacities and business processes to enable the phased

implementation of ‘Money Follows the Patient’ from 2014 onwards.

62%

38%

16%

23%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

JUL '1

0

JAN '1

1

JUL '1

1

JAN '1

2

DO

SA

Rate

(%

)

Monthly Figures 6 Month Smoothed

PHASE 1 PHASE 2

Figure 5: Day of Surgery Admission Rate for Knee Replacement across all sites for July 2010- 2012

20 | P a g e

6. Regulation of Healthcare Providers

6.1 Broad Description of the Workstream This workstream concerns the regulatory framework required to underpin the healthcare

sector. As such, it encompasses the introduction of legislation which will provide for a

mandatory system of licensing for both public and private health service providers. This

legislation will be designed to improve patient safety by ensuring that healthcare providers do

not operate below core standards. Separate from licensing legislation, regulation in relation to

authorisation and ongoing monitoring of the governance of Hospital Trusts will be required

(‘economic regulation’). Finally, the workstream also involves the creation of a new Patient

Safety Agency.

6.2 Guiding Objectives for the Workstream The overall aims driving initiatives under this workstream are:

to ensure that the systems and structures required to promote and guarantee patient

safety remain in place throughout the implementation of the reform process and

thereafter; and

to ensure that healthcare providers exercise good governance, thereby guaranteeing

their long-term viability and availability for the communities they serve.

6.3 Progress to Date Development of Healthcare Standards and Licensing Legislation

‘Standards for Safer Better Health Care’, which provide a national framework for good

governance, patient safety and quality of care, were formally launched in June 2012. These

national standards apply to all healthcare services (excluding mental health) provided or

funded by the HSE.

The national standards will lead on to the development of a mandatory licensing system to be

operated by the Health Information and Quality Authority (HIQA) which is due to commence

on 1 January 2015 and will focus on all hospitals and providers of specialised ambulatory

services such as cosmetic surgery. Work is underway within the Department of Health on a

Licensing Bill to provide for the licensing system, with outline proposals due to be submitted

to the Minister early in 2013. Government approval will then be sought in relation to public

consultation on the draft heads of a Bill.

Governance and Economic Regulation of Healthcare Providers

In addition to upholding patient safety, there is also an important role for regulation in

safeguarding good governance, financial viability and long-term sustainability of healthcare

providers. The Department has engaged the Health Research Board to undertake an

international review of evidence and experience in this area during 2013. The review will

21 | P a g e

outline the development of this type of regulation in health systems in a number of

jurisdictions. As part of this, it will critically assess:

(i) the overarching legislative and regulatory framework,

(ii) the key features or responsibilities associated with economic regulation, and the

related benefits of such regulation,

(iii) the inter-relationship between an economic regulator and other forms of health

sector regulation, and

(iv) the specific role of an economic regulator in enabling the transition to Hospital

Trusts.

The review will complement and build on lessons derived from the Evidence Review on

Hospital Trusts (see workstream on Hospital Structures). When completed, it is envisaged

that it will enable the Department to comprehensively consider the core components of health

economic regulation and their application in an Irish context.

Patient Safety Agency

The Department is examining the appropriate structures for the responsibilities that might be

assigned to the Patient Safety Agency (PSA) taking account of international experience and

the existing structures and organisations in the Irish health system. The role and inter-

relationship of the PSA with the reforming health system needs to be carefully designed and

developed. The Department is liaising with the HSE on the details surrounding the

establishment of the PSA to ensure an identifiable and distinct leadership responsibility for

patient safety and quality at national level having regard to the need for a robust quality and

safety function within the new delivery structures of the Reform Programme. The intention is

to establish the PSA on an administrative basis in 2013.

The establishment of the agency will represent a major step in improving safety and quality.

The PSA will be modelled on international examples such as the Canadian Patient Safety

Institute which aims to improve the safety of patient care through learning, sharing, and

supporting implementation of interventions that are known to reduce avoidable harm on the

basis of partnership, working with service providers and education bodies. Its initial focus

will be on leadership and capacity building for patient safety, clinical effectiveness, adverse

event learning and clinical audit.

The health and social service regulatory and monitoring function will be maintained

separately from the PSA and enhanced within HIQA with the latter retaining responsibility

for setting and monitoring standards.

National Clinical Effectiveness Committee

The National Clinical Effectiveness Committee (NCEC) was established in 2011 to provide a

framework for national endorsement of clinical guidelines and audit to optimise patient care.

The NCEC has responsibility through its terms of reference to establish and implement

explicit, transparent and robust processes for the screening, prioritisation and quality

22 | P a g e

assurance of clinical guidelines and clinical audit. National clinical guidelines will provide

explicit and transparent guidance for the delivery of safe, high quality and cost-effective care.

These guidelines will supersede all previous guidelines on a topic and will be utilised across

the public and private healthcare system.

The national suite of clinical guidelines will provide a means of identifying the most effective

interventions and/or services for a given condition. As such, they represent an important

underpinning for value-based purchasing under ‘Money Follows the Patient’ and have the

potential to play an important role in informing the standard package of care to be provided

under universal health insurance.

It is envisaged that the NCEC will ultimately sit within the new Patient Safety Agency.

6.4 Next Steps Some key next steps in relation to this workstream are as follows:

Preparation of a Licensing Bill;

Completion of an Evidence Review on Governance and Economic Regulation;

Subject to Government approval, establishment of a new Patient Safety Agency on an

administrative basis; and

Ongoing work on developing a national suite of clinical guidelines.

Consideration will also be given to the introduction of a system of primary care accreditation.

Such a system of accreditation will drive improvements in quality as well as facilitating

integration within the primary care sector and between the primary care and secondary care

sectors.

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7. Health Insurance Market

7.1 Broad Description of the Workstream This workstream involves fulfilling the Programme for Government commitment to introduce

a permanent scheme of risk equalisation for the current insurance market, examining options

in relation to the future status of the VHI and ensuring that the private health insurance

market remains well regulated, and as competitive and affordable as possible, as we move

towards a new system of universal health insurance.

7.2 Guiding Objectives for the Workstream The overall aims driving initiatives under this workstream are:

to address the current imbalance in the structure of the private health insurance

market, thereby ensuring a fair and robust community-rated market;

to ensure a vibrant and sustainable private health insurance market by delivering

increased efficiencies; and

to support the move towards a single-tier system where every patient is insured.

7.3 Progress to Date Risk Equalisation Scheme

A key component to support both community rating and the operation of a stable, well-

functioning health insurance market is the introduction of a permanent Risk Equalisation

Scheme (RES).

The Programme for Government commitment to put a permanent scheme of Risk Equalisation

in place in the private health insurance market has been achieved following the passing, in

December 2012, of the Health Insurance (Amendment) Act, 2012. The new RES came into

effect from 1 January, 2013 when it replaced the previous Interim Scheme. The main

objective of the Act is to ensure that, in the interests of societal and intergenerational

solidarity, the burden of health costs is shared by insured persons by providing for a cost

subsidy between the healthy and the less healthy, including between the young and the old.

As such, it seeks to strengthen and maintain stability in the private health insurance market.

The new RES also allows for a greater number of risk factors than the previous Interim

Scheme, including a measure of health status.

Future Status of the VHI

The Programme for Government provides for the VHI to remain in State ownership in order

to ensure a publicly-owned health insurance option within the new system of UHI. This is

being considered against a backdrop of the European Court of Justice Case regarding the

VHI's derogation from the EU Non-Life Directives which had exempted it from the

requirement to be authorised by the Central Bank.

24 | P a g e

The European Court of Justice found that Ireland failed to fulfil its obligations under various

EU directives in relation to the health insurance market by exempting the VHI from being

regulated (i.e. holding an authorisation) by the Central Bank of Ireland. In order to address

the Commission’s concerns, the Government has agreed to resolve this issue.

To achieve authorisation, the VHI will require capitalisation and a sustainable business plan

which, in turn, depends critically on a properly functioning RES. The European Commission

has a particular interest in this area from competition, State Aid and single market

perspectives. It also considers that the VHI effectively enjoys an unlimited State guarantee, a

claim rejected by Ireland. However, in order to address the Commission’s concerns, the

Government has agreed to resolve this issue.

Department officials have been engaged in negotiations with the European Commission (both

the Directorate General for Internal Market & Services, and the Directorate General for

Competition) in relation to all three interrelated issues (i.e. risk equalisation, the unlimited

State guarantee and the authorisation of VHI), and agreement has been reached on the

resolution of an alleged unlimited guarantee to VHI.

VHI will establish a new corporate structure within the parameters of its governing

legislation involving the establishment of a number of incorporated subsidiaries to undertake

health insurance and other business. The incorporated health insurance business will take

over from the Statutory Board of the VHI on the date of its authorisation by the Central Bank

of Ireland. The Department has outlined to the Commission that this would take place on or

before 31 December 2013 subject to the granting of the Irish Government’s approval for

authorisation. The Irish Government has also provided the Commission with copies of the

formal exchange of letters between the Minister for Health on behalf of the Government and

the VHI confirming that no unlimited State guarantee exists.

Finally, VHI has been in focused planning discussions with the Central Bank of Ireland

regarding the process involved in making an application for authorisation. There are two

main strands to the authorisation process. The first strand is prudential, i.e. related to

solvency, and the second relates to the qualitative or corporate governance measures. Good

progress has been made by VHI in relation to a number of structural and corporate

governance issues which are required of an authorised entity, including the new ‘qualitative’

requirements which will be imposed on all insurers, arising from the new EU SOLVENCY II

regulatory regime.

Statutory System of Health Insurance

The Programme for Government envisages a statutory system of health insurance, guaranteed

by the State, in which the UHI system will not be subject to European or national competition

law. The legal and practical requirements of this approach are likely to be very complex.

These areas are being explored in the context of work on overall UHI design (see chapters 9

and 10) and the Government will make a decision on the best way forward as soon as

25 | P a g e

possible. Any decision must take full account of the need to address the European Court of

Justice judgement comprehensively by the end of 2013.

Affordability in the Private Health Insurance Market

There is strong consensus across stakeholders on the need to safeguard the affordability of

private health insurance. Accordingly, a Consultative Forum on Health Insurance was

established in 2012 to discuss ideas for achieving cost savings and reducing the cost of health

insurance overall. The Forum has sought to identify ways of addressing costs throughout the

industry, whilst always respecting the requirements of competition law. In addition to

plenary sessions of the Forum, bilateral meetings have taken place with each insurer where

they have brought forward their own ideas for cost savings in the market. These ideas are the

subject of ongoing deliberation and policy analysis within the Department.

The Forum also provides a vehicle for engagement and consideration of issues relating to the

implementation of UHI and, in the more immediate term, the introduction of risk

equalisation. In particular, the Forum provided a valuable platform during 2012 for insurers

to directly contribute to discussions around the planned working of the RES and the Minister

was pleased to include some legislative amendments proposed by insurers as part of this

process. The Forum will continue to meet during 2013 to discuss appropriate measures to

help address costs in the industry.

In addition to the general work of the Forum, the Department continues to concentrate on the

need for VHI to address its costs. The VHI has also been strongly focused on this aspect of its

business and an external review of its claims costs is nearing completion.

The VHI recently reported that its cost containment programme has saved €200m since 2009

by applying various cost containment measures including:

Reducing consultants fees by 15%

Reducing the prices its pays for various procedures by between 13% and 53%

Introduction of a revised payment system for Radiologists and Pathologists.

The VHI is also focused on claims recovery through the work of its Special Investigation

Unit, which has resulted in savings of approximately €7m during 2011.

7.4 Next Steps

Immediate next steps in relation to this workstream include:

Continued work by the Department and the VHI in relation to the latter’s application

process for authorisation by the Central Bank of Ireland. The aim will be to reach the

point of authorisation, subject to a final Government Decision regarding capitalisation

of VHI, by the end of 2013. The process is dependent on decisions, not only of the

26 | P a g e

Government, but also of the European Commission (in relation to State Aid issues)

and the Central Bank of Ireland as the independent Irish financial regulator.

Continued exploration of the legal and practical requirements associated with a

statutory system of health insurance which is not subject to European or national

competition law as envisaged in the Programme for Government.

Continued focus on the issue of costs through 2013 and beyond. In the case of VHI,

this will involve completion of the external review and the implementation of its

findings. Given VHI’s very significant share of overall costs in the market, specific

areas which it will need to address include:

Audit of the volume of procedures;

Clinical audit to determine the appropriateness of procedures being claimed for;

Benchmarking to determine why VHI is paying what it is paying for procedures at

the current rate, i.e. base costs, and consider how to drive down costs in this area.

In addition, the Minister has asked VHI to submit a detailed cost containment plan,

which is in preparation, with clear targets and timelines under each heading; he has

made it very clear that VHI must aggressively cut its cost base so as to minimise the

need for any future premium increases.

Following consideration of how the market is operating under the new RES and

receipt of a Report from the Health Insurance Authority later this year, the preparation

of primary legislation in 2013 to give effect to the appropriate RES credits which

should apply to ensure the maintenance of a balanced, healthy private health

insurance market.

Ongoing consideration of any measures deemed necessary to assist with ensuring the

maintenance of a healthy and functioning private health insurance market, including

the introduction of Lifetime Community Rating and the introduction of a standard

plan/ core set of benefits for the current market.

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8. Enabling Change

8.1 Introduction Chapters 3 to 7 consider all of the major elements which must come together to create the

future UHI landscape. However, successful delivery of reform is also contingent on a

number of critical enabling factors. These ‘change catalysts’ are key to supporting

transformation across the whole health system and include:

unique identifiers,

common datasets,

systematic improvement of clinical and operational processes through the work of the

Special Delivery Unit and the National Clinical Programmes, and, most importantly,

a flexible, motivated and skilled workforce.

This chapter briefly reviews a number of these enablers.

8.2 New Transitional Governance Structures Having effective structures in place with strong governance and management provisions is

fundamental to achieving the objectives set out in the health reform programme. As noted in

Future Health, the aim is to implement the necessary structural reform on a phased basis.

Work is already underway to implement the first phase of new governance structures which

will provide for strengthened accountability for the HSE to both the Minister and the

Department, in line with the commitments set out in the Programme for Government.

The Health Service Executive (Governance) Bill 2012 was published in July 2012. It

provides for the abolition of the Board of the HSE and its replacement by a new governance

structure. The Board will be replaced by a Directorate, headed by a Director General and

including directors drawn from HSE senior managers. The Directorate will be accountable to

the Minister for the performance of both its own and the HSE’s functions. As Chairperson,

the Director General will account to the Minister on behalf of the Directorate in relation to

the HSE’s performance. S/He will do this through the Secretary General of the Department.

The National Directors will be responsible for the delivery of services within their particular

service areas and will have a clear mandate to drive sustained performance improvement.

This will involve the development of strengthened frontline provider structures, while

simultaneously establishing enhanced accountability arrangements via new performance

contracts, underpinned by ‘Money Follows the Patient’ funding systems where appropriate.

As such, the new governance arrangements are designed to aid development of the new

organisational structures and financial systems delineated in chapters 3 to 5, thereby

preparing the system for the overall move towards UHI.

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Figure 6: Planned Phase 1 Governance Structures

*Note it is intended that the Child and Family Support Agency will be established in 2013.

In order to ensure a co-ordinated approach to service delivery, a review of Integrated Service

Areas (ISAs) will be conducted in 2013. The review will (i) ensure maximum alignment

between all service providers at local level, (ii) review executive management and

governance arrangements, and (iii) inform new structures for the delivery of primary care.

8.3 Special Delivery Unit The health reform programme envisages a single-tier system where universal health

insurance guarantees timely, quality care for all. Thus, achieving faster and fairer access to

public hospital care is an essential prerequisite for preparing our system and ensuring it is fit

for purpose in advance of the move to UHI.

The Special Delivery Unit (SDU) was established in the Department of Health in June 2011

with the objective of driving down waiting times for both scheduled and unscheduled care in

Irish hospitals and introducing a major upgrade in the performance capabilities of the Irish

health system.

Since its establishment, progress has been made on tackling waiting lists for inpatient,

outpatient and daycase treatment (scheduled care) and long waits in Emergency Departments

(unscheduled care). The SDU has put in place major national programmes to assist hospitals

in addressing problems associated with delays in accessing care. Ambitious targets have been

set for hospitals and these are being rigorously monitored on an ongoing basis.

Department of Health

Hospital Directorate -

Hospital Fund

Hospital Groups

Primary Care Directorate -Primary Care

Fund

ISAs

Mental Health

Directorate

Social Care Directorate -Social Care Subheads

Public Health Directorate -Public Health

Subhead

Child & Family

Directorate

Corporate / Shared

Services Directorate

Director General

Health Service Executive

29 | P a g e

8.3.1 Waiting Times – Unscheduled Care.

The total number of patients waiting on a trolley in 2012 was 23.6% less than in 2011. This

equates to almost 20,352 fewer people waiting on trolleys. Among the factors that are having

a positive impact on patient experiences in Emergency Departments are the appointment of

additional consultants in Emergency Medicine, the introduction of new governance structures

in all Emergency Departments and the implementation of the National Acute Medicine

Programme which aims to optimise and standardise the management of acutely unwell

medical patients. In addition, under the National Emergency Medicine Programme,

standardised clinical guidelines, protocols and tools to enhance patient care will be

implemented in the coming 12 months which should further contribute to improved patient

access and service quality.

8.3.2 Waiting Times – Scheduled Care

Inpatient/daycase

The inpatient/ daycase access targets for 2012 and the public hospital system’s progress

against these targets is set out below.

Target: No adult should wait more than 9 months for an inpatient/daycase procedure

Result: The number of adults having to wait more than 9 months for inpatient and day

case surgery was down from 3,706 in December 2011 to 86 at the end of

December 2012, a 98% decrease.

Target: No child should wait more than 20 weeks for an inpatient/daycase procedure

Result: The number of children waiting over 20 weeks was down from 1,759 in

December 2011 to 89 at the end of December 2012, a 95% decrease.

Target: No patient should wait more than 13 weeks for a routine GI endoscopy

Result: The number of patients waiting over 13 weeks for a routine endoscopy

procedure was down from 4,590 in December, 2011 to 126 at the end of

December 2012, a 99% decrease.

Outpatient Waiting Times

Much work has been done in relation to developing and implementing standardised reporting

of outpatient waiting times through the HSE Outpatient Data Quality Programme. The SDU

together with the National Treatment Purchase Fund (NTPF) will build on the work already

undertaken by the HSE and ensure that individual patient-level data are available at a national

level from all hospitals. The collation and analysis of such data in a standardised format will

show the distribution of long waiters across all hospitals and allow the SDU and NTPF to

target resources towards those patients who are waiting longest and ensure that they are seen

and assessed.

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During the period 2013-2015, the HSE, together with the SDU and the HSE Clinical

Programmes, will reform the structure, organisation and delivery of outpatient services to

ensure that the right patient is seen and assessed by the right health professional at the right

time. Key elements of this programme of reform will include on-going validation of waiting

lists, the systematic and standardised management of referrals from primary care, a reduction

in unacceptably high ‘do not attend’ rates and appropriate discharging from outpatient

services when clinically appropriate to do so.

The HSE/SDU maximum waiting time targets for first time outpatient appointments are:

12 months by 30 November 2013;

26 weeks by 30 November 2014, and

13 weeks by Nov 2015.

8.4 National Clinical Programmes Over the past number of years, the HSE has undertaken significant work to develop and roll

out National Clinical Programmes. These programmes provide a national, strategic,

standardised and co-ordinated approach to a wide range of clinical services.

There are currently over 30 Clinical Programmes at various stages of development/

implementation (see Figure 7). Many of the programmes have produced models of care and

guidelines which have been jointly agreed and endorsed for implementation with the

colleges.

The Clinical Programmes have 3 main objectives:

Improve quality of care delivered to all users of HSE services;

Improve access to all services; and

Improve cost effectiveness.

The application of the programme approach aims to improve disease management and patient

care by putting the patient at the centre of care, by providing for clinical accountability and

by achieving clinical leadership and buy-in. The implementation of clinical models also

ensures that forecasted benefits are delivered and that continuous improvement is sustained.

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Figure 7: National Clinical Programmes

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8.5 Health Information and ICT High calibre health information will be the lifeblood of quality, safety, payment and other

regulatory processes within the future health landscape. It will also be central to delivering

responsive, integrated care across multiple settings. Having good quality health information,

and effective ICT systems that facilitate the efficient collection, analysis and use of such

information, is, therefore, critical for enhancing the overall capacity and performance of the

health system and facilitating implementation of the reform programme.

It is acknowledged that major developments will be needed to tackle the capacity deficit in

information and ICT. While some progress has been made in addressing information deficits

and information standards, including work undertaken by HIQA, significant improvements

will be needed to deliver the patient-level information flows necessary for reform

implementation purposes.

8.5.1 Health Information Bill

The Health Information Bill, which is currently being drafted, will provide a legislative

framework for better governance of health information. The Bill will provide a legal

framework for the introduction of an individual identifier for use in the health system.2 There

are also provisions for identifiers for healthcare organisations.

In addition, the Bill will establish a standards-based approach to supporting inter-operability

between computer systems. This is in place of a National Electronic Health Records System

which international experience shows is costly and may not bring the expected benefits. The

Bill also supports a standards based approach to health information management so that

health information can be quality assured throughout the health system. Other initiatives in

the Bill include provisions for data matching and health information resource programmes

(population registries).

8.5.2 Information and ICT Strategy

The Department of Health will develop an eHealth Strategy in conjunction with the HSE.

The Strategy will provide a framework for the design and implementation of eHealth systems

to support and enable the delivery of integrated care under the reform agenda. The Strategy

will be completed in the first half of 2013.

In order to realise the eHealth Strategy and ensure that the necessary information, technical

and governance structure is in place, an Information and ICT Strategy Unit, led by a Chief

Information Officer, will be established in the first half of 2013. An Information and ICT

Advisory Committee, which will include appropriate outside expertise, will also be formed to

support the Strategy Unit.

It is widely understood that significant investment in ICT capacity and delivery capability

will be required to support the reform agenda.

2 The development of identifiers for use in the health sector will take full account of the public services card.

33 | P a g e

8.6 Human Resources The Public Service Agreement (‘Croke Park Agreement’) has been identified as critical to

advancing the health reform agenda and responding to the healthcare needs of the population

in an appropriate and sustainable manner. Notably, it has facilitated delivery of health

services against a backdrop of cumulative budget and staffing reductions.

Since 2010 the Agreement has helped the health sector to manage the reduction of staff

numbers by over 8,200 whole-time equivalents (WTEs). Evidence of the value of the

Agreement, in particular its flexibility provisions, can be seen in terms of the response of the

system during the ‘Grace Period’. In the six months to the end of February 2012, some 3,000

(WTE) staff members retired from the health service and all key services including maternity,

critical care, neonatal and essential social services were maintained without interruption. As

well as the overall reduction in numbers, the Agreement has facilitated the redeployment or

re-assignment of some 6,900 staff across the health service.

Other reform measures include:

reviews of rosters to optimise efficient delivery of services;

an extended working day for hospital laboratory and radiography services;

agreement to major work practice changes for consultants; and

co-operation by staff with clinical care changes in hospitals, in particular under the

Acute Medicine Programme and the Productive Operating Theatre system.

The Public Service Agreement will continue to be used to the fullest extent possible to

protect health services and to facilitate implementation of the reform programme. National

discussions commenced with all public service unions in January 2013, the aim of which is to

achieve additional reductions in the cost of delivery of public services of the order of €1

billion and, in this context, the health sector will be required to deliver further savings.

The Health Sector Action Plan (for implementation of the Public Service Agreement) has

recently been revised to reflect the fact that the health sector is moving into a further, more

demanding phase of implementation of the Agreement, particularly as resources and staff

numbers are further reduced. This new Plan contains measures which apply to all staff,

including:

revised rostering arrangements, increased use of redeployment and implementation of

revised sick leave rules, adopting flexible models of care and changes to skill-mix,

increased use of shared services and external service delivery arrangements; and

co-operation with new governance and management structures at national and other

levels, including establishment of Hospital Groups.

It also sets out specific measures relevant to particular disciplines or staff groups such as

consultants, nurses and allied health professionals.

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9. Designing a Universal Health Insurance Model

for Ireland

The previous chapters set out the core building blocks which must be put in place to prepare

the system for universal health insurance, as well as the ‘change catalysts’ which will support

that transformation. In addition to all of these, detailed preparatory work is required in

relation to the UHI model itself. This task represents the final major workstream under the

remit of the UHI Implementation Group, namely the UHI Design workstream.

9.1 Broad Description of the UHI Design Workstream At its heart, this workstream is about the fundamental legal and structural principles which

will underpin the future health system in Ireland. It is about delineating the rights and

responsibilities of each and every stakeholder within our future health system from citizens to

health insurers, healthcare providers, independent regulators, professional bodies and the

State. This work spans six major, interconnected policy areas as outlined in figure 8 below:

Figure 8: Key policy areas within the UHI Design Workstream

9.2 International Evidence In order to inform deliberation on the key design questions which stand to be answered as

part of this workstream, Department of Health officials have reviewed a wide range of

international literature on insurance-based health systems. Some of the main findings and

significant considerations which have been gleaned from this work are summarised below.

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Types of Multi-Payer Model

The Government is committed to the introduction of a multi-payer insurance model. In order

to design the optimal multi-payer model for Ireland, the Department has explored multi-payer

insurance systems in a number of other countries. These systems can be broadly grouped into

five categories or typologies.

The first type can perhaps be described as the traditional social health insurance model

with universal coverage of the population by non-competing insurers, insurance contributions

linked to ability to pay and resources largely raised through payroll contributions and

taxation. Examples of such systems include France and Japan.

There are also competitive social health insurance models where insurers operate as largely

independent, ‘not for profit’ entities and provide universal coverage of the population. Under

this model, insurers are also predominately funded via payroll and Exchequer contributions

and are often not subject to EU competition law. However, they are allowed to compete for

customers with citizens offered a choice of insurer and a right to switch periodically. The

Czech Republic offers an example of such a system.

A third variation is the mixed model where social health insurance and private health

insurance co-exist to provide universal coverage. Germany’s health system encompasses this

blended approach. Since 2009, insurance is mandatory for all with the majority of the

population automatically covered by the statutory health insurance system and free to choose

from their preferred statutory fund. Others have a choice to either opt in to the statutory

system or take out private health insurance3. The statutory health insurance system is

predominately funded through payroll contributions albeit with a notable shift in recent years

towards general taxation and direct payments.

The Dutch had a mixed model but moved in 2006 to a universal insurance system

operating under private law. Under this system, health insurance is mandatory for the

whole population4 with health insurers free to set premiums and compete for customers. The

system is part funded via payroll and general taxation contributions and part funded via direct

premiums. Affordability of direct insurance premiums is supported by a mean-tested

healthcare allowance. While the insurance market is subject to EU competition law, it is also

governed by important principles of open enrolment, lifetime cover, community rating and

risk equalisation, all designed to protect social solidarity. However, supplementary health

insurance in respect of all items falling outside of the prescribed universal insurance package

is discretionary and risk rated.

3 Some sections of society are automatically covered by governmental schemes, eg. military, police etc. As

such, these individuals cannot opt into the statutory health insurance system. 4 There are two exceptions to this. Military personnel receive care from the Dutch military medical services,

while conscientious objectors pay a substitute tax in lieu of health insurance contributions. The substitute tax is

held in a separate account by the Health Insurance Board and can be used to pay for healthcare costs incurred by

the conscientious objector.

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Finally, while the Dutch health system operates under private law, it is subject to significant

Government regulation in order to protect social solidarity. By contrast, a typical private

health insurance model involves risk-rated premiums which are freely set by the market, i.e.

premiums are determined based on an assessment of each individual’s claims risk and

without regard to ability to pay. Moreover, health insurers are free to refuse coverage if they

believe a potential customer represents an unattractive or uninsurable risk. The health

insurance market which operates in the United States of America displays some of these

features. However, with the enactment of the Patient Protection and Affordable Care Act in

2010, sweeping reform is underway. The Act introduces universal mandatory health

insurance coverage, extends financial protection and provides for important insurance

reforms such as guaranteed issue and community rating.

Basket of Services

Universal health insurance systems generally provide coverage for a comprehensive package

of primary and hospital care services. While the range of services varies from country to

country, broadly speaking, such systems cover hospital services and, within the primary care

sector, GP care, dental care, therapy services, maternity care, prescribed pharmaceuticals and

medical devices.

While service coverage is broad, co-payments in the form of flat rate payments, percentage

payments of the total costs, excess payments, etc. can apply. It is also the case that

conditions and/or limitations may, in certain circumstances, attach to the availability of the

services provided under the basic benefits packages. In this regard, the following restrictions

and conditions are notable:

Dental Care

In some of the countries reviewed, dental services are, except in limited circumstances,

excluded from the basic package of services. Examples of such countries include Estonia

where adult dental care is excluded and Israel where all dental care is excluded, except for

maxillofacial surgery in trauma and oncological cases, and dental care for oncology patients.

In other cases, the basic package of services for those under 18 years of age can be more

extensive than that applying to those aged 18 years and older. For example, in the

Netherlands, dental care for those in the older age group is limited to specialised surgical

dentistry (oral surgery) and the associated x-rays and dentures.

Pharmaceuticals

Prescribed pharmaceuticals are generally covered by the basic package of services although

co-payments can apply. In addition, some countries, for example, Germany and the

Netherlands, have reference pricing systems which define a reimbursement limit for groups

of comparable drugs. The insured person must pay for costs in excess of the reference price,

in addition to co-payments where applicable. Non-prescribed over the counter (OTC)

products tend not to be covered.

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Paramedical Services

In general, paramedical (i.e. therapy) care is included in the standard package subject to

referral for such services by a doctor. In the Netherlands, the entitlement to physiotherapy

for those over the age of 18 years is limited to treatment of certain chronic conditions,

excluding the first nine treatments for each disorder. Those under 18 years of age are entitled

to nine treatments per year for each disorder which may be extended by another nine

treatments5.

Finally, there would appear to be some consensus in relation to the services that are excluded

from the standard benefits basket in the different countries reviewed. In the main, these

include cosmetic surgery, products deemed not medically necessary, OTC drugs,

vaccinations for travel and medical certificates. In certain countries, preventive health

measures such as vaccination and screening programmes may also be excluded on the basis

that such programmes concern population health and are, therefore, funded directly from

general taxation. That said, the standard package of services is also a product of each

country’s culture and value system. For example, the reimbursement of complementary

treatments such as homeopathy, acupuncture and neural therapy in Switzerland is almost

unique in Europe, presumably indicating strong public desire for such treatments. The

reimbursement of balneotherapy (spa treatments) in Germany similarly represents traditional

values in the country.

Process for Determining the Standard Basket of Services

The establishment of a robust and transparent process for determining the standard basket of

services will be central to the success and sustainability of the future UHI system in Ireland.

In acknowledgment of this, the Department undertook a detailed examination of international

evidence on approaches to planning and priority-setting. In addition to reviewing approaches

to planning and priority-setting at national level, the examination also sought to distil a set of

best practice principles to guide national planning and priority-setting in Ireland before

briefly considering their application in the future UHI system.

Priority-setting is a systematic approach to distributing limited resources between competing

demands in order to achieve the best health outcomes in an efficient and sustainable manner.

The evidence review found that that priority-setting is not a ‘one-size-fits-all’ process.

However, it nonetheless proposed the development of best practice principles comprising:

transparency,

determination of values, and

impact on policy,

as a good starting point upon which to build a national priority-setting framework.

5 The standard package provides more comprehensive coverage in the case of certain restricted disorders.

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In particular, the study suggested that the principles of transparency and determination of

values could usefully underpin the process for defining the standard health basket.

Mechanisms to facilitate transparency might include the appointment of members of the

public to any entity charged with helping to determine the composition of the standard

basket, the disclosure of possible conflicts of interest by all individuals involved in helping to

determine the composition of the basket, and the systematic disclosure of the basis for

inclusion or exclusion of services from the standard basket. Public values should also be

taken on board albeit that this will have to be balanced with a requirement to consider

difficult policy decisions and trade-offs.

In this regard, the role of health technology assessment is vital in determining the relative

cost-effectiveness of medical interventions and providing a robust evidence base to inform

subsequent coverage decisions. The generalised cost-effectiveness analysis framework

(GCEA) is also considered a useful tool for analysing treatments that are most cost-effective.

Finally, having established a robust process for determining the services to be included in the

standard basket, it is also necessary to consider the approach for delineating those services,

i.e. defining the scope of the standard health basket. To this end, the study indicates that a

positive list approach (i.e. defining all treatments, interventions, pharmaceuticals and other

services to which people are entitled) or a negative list approach (i.e. stipulating all services

not covered by the scheme) can be used. It is notable that, in defining the detailed benefits

covered by universal insurance systems, many countries appear to adopt both approaches.

Raising Resources

Decisions on coverage cannot be divorced from considerations on revenue, i.e. the

mechanisms by which we pay for the basket of services. This section briefly outlines

common trends in relation to funding of universal insurance-based health systems.

Payroll-related social insurance contributions represent the predominant funding source

across the countries reviewed6. This is usually broken down into an employer and an

employee contribution. However, the vast majority of countries raise revenue from multiple

sources and there is a notable trend overall towards diversification of the funding base. In

particular, a significant shift towards general taxation can be discerned. In some cases this is

used simply to supplement the funding base while, in others, it is explicitly linked to covering

the health insurance costs of the economically inactive.

General taxation can offer a number of important benefits. Firstly, it offers a considerably

broader funding base than payroll-related contributions which are essentially limited to

earned income. This is vital in a time of ageing societies with a corresponding shrinking

labour market and growing dependency ratio. However, it is also considered important from

6 In Israel, the health insurance system is financed primarily through a combination of earmarked taxes and

general taxation. In the USA, the Medicare system is financed through a combination of payroll contribution,

premiums and general taxation, while Medicaid is financed via Federal and State taxation.

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the perspective of economic competitiveness. This is because a shift to general taxation

mitigates the burden on labour. Indeed, the importance of protecting competitiveness in the

face of rising healthcare costs is apparent in recent policy decisions across a number of

countries where employer contributions have been frozen, or even reduced, while the funding

share from general taxation has increased.

In addition to the benefits outlined above, in cases where general taxation is allocated on the

basis of an explicit formula or earmarking principle (eg. a fixed contribution to cover the cost

of each person who is economically inactive), this can ensure counter-cyclical stability and

mitigate the impact of funding fluctuations associated with increases in unemployment. At a

general level, it also guarantees dedicated revenues, thus supporting effective planning and

commissioning of sustainable, reliable health services7.

Finally, as all health systems grapple with issues of cost containment and sustainability, a

notable trend appears to be an increase in the use of co-payments. While co-payments serve

to raise revenue, the policy rationale for their introduction often appears to relate to reducing

inappropriate use and containing costs.

Principles in relation to Revenue Raising

How you raise resources can affect the efficiency, effectiveness and equity of your health

system, and can also have wider economic impacts. To this end, the European Observatory

on Health Systems and Policies, in conjunction with the World Health Organisation, recently

identified the following core principles in relation to raising revenue for healthcare8:

Ensuring adequate levels of statutory resources in order to safeguard equitable

access to health services

In broad terms, countries with a greater dependence on mandatory contributions

achieve greater equity of access to services and better financial protection.

Ensuring stability and predictability in revenue flows in order to sustain the

delivery of services

Significant year on year fluctuations in the level of funding available can be highly

disruptive to the sustained delivery of services and undermine strategic planning and

commissioning.

Fairness with respect to the burden of financing health services

OECD research has found that direct taxes and social insurance contributions are

progressive while out of pocket payments are always regressive9.

Efficiency and transparency

7 A key lesson from the literature seems to be that, successful introduction of an insurance-based system doesn’t

necessarily need a dedicated or earmarked tax but does need stable, dedicated revenues which purchasers can

depend on when negotiating contracts. 8 WHO, Health system responses to financial pressures in Ireland: policy options in an international context

(Ed. Thomson, Jowett, Mladovsky, November 2012) 9 It also found that private health insurance contributions are often regressive but this can depend on whether

such contributions are mandatory and matched with a system of financial support for those on lower and middle

incomes.

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The collection of revenues incurs administrative costs and, so, consideration must be

given to the most efficient mechanisms for raising revenue. In addition, public

acceptability of revenue raising mechanisms can be greater where there is

transparency and satisfaction with respect to how that revenue is spent.

Non- health concerns such as impact on wage competitiveness

As noted above, demographic and economic considerations must also be taken into

account when evaluating approaches to revenue raising.

The above principles provide a robust analytic framework for developing detailed policy

proposals on the issue of raising revenue under UHI.

Payment Mechanisms

Purchasing mechanisms can be a powerful tool for supporting and incentivising the delivery

of better quality healthcare. In order to maximise the contribution that purchasing can make

in this regard, the World Health Report 2000 - Health Systems: Improving Performance

advocated strategic purchasing as a means of improving the performance of health systems.

Instead of a passive approach involving, for example, reimbursing for services

retrospectively, strategic purchasing requires a proactive approach in relation to decisions

about which services should be bought, how and from whom. The concept encompasses both

the strategic use of service contracts and the strategic selection of payment mechanisms in

order to achieve health policy goals.

In relation to the purchase of health services in countries that have insurance-based health

systems, it is possible to discern particular trends.

Hospital Services

In the case of hospital care, the main trend has been to move from fixed block grant

allocations and/or per diem payment systems to prospective Diagnosis Related Group (DRG)

case-based payment systems where hospitals are paid on the basis of the actual care

delivered. The main reasons for introducing such systems are to drive efficiency and increase

transparency. Countries that have moved to DRG-based funding systems include Germany,

the Netherlands10

, France, Estonia, Czech Republic, Slovakia, Poland and Israel.

As noted in section 5, Ireland also plans to introduce a prospective DRG case-based system

as part of its new ‘Money Follows the Patient’ funding model.

Primary Care

On the primary care side, various payment methods apply, including fee-for-service,

capitation and salary.

10

The Netherlands is moving progressively to a competitive pricing model, where procedures are classified

using a DRG-type system but are, to an increasing extent, freely negotiated between insurers and hospitals.

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Fee-for-service involves a payment for each unit of service provided and is intended to

provide doctors with the flexibility to respond to patients’ needs. Capitation comprises

payment for the care of individual patients for a particular period of time and is independent

of the extent of services individuals require, although it is often risk-adjusted. Finally, a

salary-based payment approach relates to units of the healthcare professional’s time and is

independent of the volume of services provided or the number of patients treated.

It is acknowledged that no single payment method is best placed to fully achieve the

objective of cost-effective delivery of high quality patient care. Each of the foregoing

methods can affect provider behaviour in both positive and negative ways. Perhaps for this

reason, at European level, there has been a move towards mixed payment systems

(Netherlands, Czech Republic, Hungary, Slovakia and Slovenia). The evidence underpinning

the Report of the Expert Group on Resource Allocation and Financing in the Health Sector

noted that mixed systems which have a large prospective component seem to be more

successful in achieving the overall health policy objectives. It also noted that the challenge is

to provide the necessary incentives for improved efficiency and quality while maintaining the

prospective nature of payment so as to ensure financial sustainability.

Integrated Healthcare

Integrated health care involving the coordination of care across a range of providers is

increasingly being recognised as fundamental to addressing the needs of those with chronic

diseases, multiple complex health issues and frail older people. In order to incentivise this

model of care, many countries are redesigning their payment systems. In each case, the

objective is to use the payment mechanism as a means of supporting joined up, continuous

care, and to shift the focus from rewarding activity to rewarding patient outcomes.

Common trends include:

the earmarking of funds to promote initial introduction of integrated care models;

the use of integrated care contracts whereby purchasers contract with a single

provider entity or network to provide care across traditional professional lines or

settings11

; and

the use of bundled payments. This involves making a single payment for the entire

episode of care to the provider entity which is then divided among different healthcare

professionals or providers along the care pathway.

11

The use of integrated care contracts necessitates the development of integrated provider entities or networks

with whom the purchaser can contract. In the United States of America, the Patient Protection and Affordable

Care Act 2010 provides for a number of seminal reforms, including the creation of Accountable Care

Organisations, i.e. networks of primary care and hospital providers who agree to take responsibility for

providing a defined population with care that meets specified quality targets. It also provides for the

establishment of a Centre for Medicaid and Medicare Innovation to develop and test payment models for

improving quality of care and lowering costs.

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Some high-level examples of the use of integrated payment systems are outlined in the boxes

below.

Kaiser Permanente Medical Care Programme, USA

The Kaiser bundled payments model is an example of a payment system that incentivises

providers, in both hospital and GP-type settings, to collaborate closely in relation to the

provision of health care. Under the bundled payments model, all costs associated with the

range of care provided are paid to a single entity which then distributes the payment among

the various providers of care.

Within the Kaiser Programme, Permanente Medical Groups (PMG) are multi-disciplinary

groups of physicians who receive a fixed capitation payment to provide the full range of care.

The PMG funds an incentive pool from its capitation payment which rewards staff based on

meeting quality and service goals. The physicians are paid market-competitive salaries so

there is no financial incentive to over treat or under treat patients. However, physicians can

earn an annual performance incentive payment of up to 5% of salary based on measures of

quality, service and patient satisfaction, workload and group contribution.

Disease Management Programmes, Netherlands

The Netherlands introduced Disease Management Programmes for those with chronic

conditions, e.g. diabetes and management of cardiovascular risks (CVR). The integrated

payment system, introduced in 2010, is seen as having a central role in the delivery of high

quality and sustainable integrated care for those with chronic conditions. Earlier attempts at

enhancing the quality and continuity of care for those with a chronic condition were

hampered by fragmentary funding.

The new integrated payment system is a prospective reimbursement system. It provides an

all-inclusive payment to a care group comprising multidisciplinary teams of providers in

respect of the total episode of care for people with chronic conditions. Insurers purchase

integrated care from care groups by negotiating a fixed price per patient per year, based on

the expected case-mix of patients with a chronic disease. The price combines the costs of

multiple professions working in primary care and, to a limited extent, in specialised or

hospital-based outpatient care.

Finally, the international literature offers some interesting examples of other innovative

mechanisms for supporting integrated, structured care. For example, in France, disease

management programmes include certain preventative and patient education services which

are not covered by the standard benefit package, thereby encouraging voluntary enrolment by

patients. In Germany, the risk equalisation scheme is used to reinforce the drive towards

disease management. It does this by linking certain health status adjustments to enrolment in

a chronic disease management programme, thus incentivising insurers to fund such

programmes. These examples underscore the importance of taking a coherent, ‘whole

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system’ approach to our health reform programme so that incentives are aligned to maximum

effect across all domains and workstreams.

The international evidence considered by the Department has highlighted a number of

important principles which should underpin deliberation and decision-making in relation to

both determining the basket of services and raising revenue to fund such services. It has also

helped in identifying and shaping the key design questions which stand to be answered in the

course of developing costed policy proposals and producing the White Paper on Universal

Health Insurance. This is discussed further in chapter 10.

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10. Developing a White Paper on Universal

Health Insurance

10.1 Development of an Analytical Framework and Capacity The Government is committed to the publication of a White Paper on Universal Health

Insurance which will set out details of the UHI model in addition to the estimated costs and

financing mechanisms associated with the introduction of UHI.

Preparation of the White Paper is a complex and technical process. It will involve significant

research and financial modelling to support analysis of different design options and to help

estimate the cost of different coverage and financial support systems. As a first step in this

process, the Department has scoped out the major projects, studies and policy appraisals

which need to be undertaken in order to produce costed policy proposals for consideration by

Government. These are summarised in the analytical framework overleaf.

The framework arranges the projects, studies and policy appraisals into a series of broad

work modules in order to highlight the major sequencing and interdependencies between

various tasks. It also colour codes tasks as a means of identifying the key specialist skills

required to deliver on each.

As a second step towards the preparation of costed policy proposals, and the related

development of a White Paper, the Department is currently in the process of sourcing

particular specialist skills and capacity to support delivery of each of the tasks. Some

research support has been secured and detailed work on reviewing international evidence has

commenced. This work will be complemented by research to be undertaken by the Health

Research Board on integrating UHI services, health and wellbeing services and social care

services around the needs of the patient. In addition, a tendering process to procure

specialised legal research and analysis in relation to the design of the UHI model is well

advanced. Additional specialised research and technical expertise will be obtained during

2013 to further advance the overall programme of work.

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Figure 9: Analytical Framework: work modules and projects/studies

4.D. Modelling of

financial and coverage

implications of different

design options for

financial support

(subsidy) systems. TA

3.A. Review of current situation on raising, pooling

and allocating resources in Ireland and a review of

international approaches to raising resources in a

mandatory health insurance system. TA

2.E. Forecasting costs

of different basket

options under various

scenarios. TA

3.C. Modelling revenue

generation potential

under various scenarios

to support financing of

different basket options.

TA

3.B. Preparation of draft

proposals on raising and

pooling resources under

UHI. DH

UHI Model (WM 1)

UHI Basket of Services (WM 2)

Raising revenue under UHI (WM 3)

4.C. Draft proposals on

new financial support

system. DH

UHI Financial Support System (WM 4)

4.A. Review of current

financial support (subsidy)

systems for health in Ireland.

TA

4.B. Review of measuring

incomes, and review of

availability of relevant Irish

data. HRB

Legend: DH = Department of Health, HE = health economic services, LR = legal research services, TA = technical assistance

services, HRB = Health Research Board.

1.C. Options appraisal of

different purchasing/contracting

approaches under UHI. HE

1.A. Detailed Legal Review

of different UHI models.

LR

1.B. Detailed Policy Review

and Appraisal of different

UHI models. DH & HE

2.A. Baseline review of

existing expenditure, unit

costs and service volumes.

TA

2.B. International Evidence

Review on design and

composition of UHI basket.

DH & HE

1.D. Draft Proposals on key

features of UHI model. DH

2.D. High-level Policy

Proposals on Standard

Basket and Identification of

Broad Options. DH

2.C. International Evidence

Review on Planning and

Priority-setting. DH

Costing of Proposals Draft proposals Evidence Generation

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10.2 Policy Choices and Trade-offs In striving for the optimal single-tier health system for Ireland, there are inevitable policy

trade-offs to be confronted. These trade-offs often involve tensions between efficiency and

equity or between comprehensiveness and cost control. An example of the efficiency/ equity

trade-off might be the decision to fund services for remote island populations in order to

guarantee equitable access to services for these people even though suboptimal economies of

scale are involved. Examples of the trade-off between comprehensiveness and cost control

include having to prioritise certain services and restrict or target others in order to remain

within budget ceilings, or limiting the value of services covered by the State (via co-

payments or deductibles) in order to contain costs. As we have seen from the international

evidence summarised in chapter 9, all countries are faced with these choices in the design of

universal healthcare systems and benefit packages.

In all cases, the trade-offs centre around three basic dimensions of the health service- the

proportion of the population to be covered, the range of services to be covered and the

proportion of the total costs to be met. These three dimensions, which must be confronted by

all policy-makers when designing health systems, are depicted in Figure 10 below.

Figure 10: Dimensions to consider when developing health services and health financing systems

(source: WHO, 2010)

The development of detailed and costed policy proposals will empower us to understand and

decide on these core trade-offs as we design the future UHI system for Ireland. As such, the

work ahead, while challenging, is key to ensuring that, as a society, we can seize the

opportunity to create a health service which is sustainable, equitable and there for all of us

when we need it.